Where to Go In a Dollar Tumble

by | Dec 23, 2000 | Archives

First let me be clear that the U.S. dollar is already tumbling as I write and there are at least three factors that could push it down 10% or more versus the euro over the upcoming months.

The first factor is that (as a 500 year old prophesy foretold) is that the world in the new millennium would be led by a fool. This is not a swipe at George bush by the way.

It is fact that most U.S. leaders (Gore was the same) who will lead us into this next 1000 years made their way to power (or perhaps impotence) on the wrong footed notion that they would spend a huge U.S. surplus, to improve Social security and make Medicare & Medaid help more people.

This idea is wrong for several reasons. First more Americans are going to be poor than anyone realizes. The U.S. savings rate is now below zero. This means that more and more Americans have plowed their savings into stocks instead of CDs or bonds. The U.S. market has already wiped out huge amounts of savings. This means less tax collected and increased social spending. Second the U.S. population is rapidly becoming less healthy. USA Today (December 15 page 2A) reports that according to the National Health and Nutrition Survey, 61% of all Americans are now obese (30 pounds or more over a healthy weight). The number of adults who are obese has nearly doubled since 1970. This fact alone could destroy the Federal budget. Third the dollar has risen steadily versus the euro since its inception but this trend has finally reversed.

In short this means that there could be a loss of confidence in the greenback. Where to invest if this is true? Precious metals may be one place. A short in the Japanese yen may be another. I'll send you a Christmas message. The gift will be an analysis of what a yen loan could mean to your wealth over the next year.